The winter holiday season is here, and I wanted to join in the festivities. Recently, advisors have become more comfortable turning to active ETFs to help them and their clients navigate the uncertain market environment. Actively managed ETFs have gained traction in 2023.
For example, the JPMorgan Equity Premium Income ETF (JEPI) gathered $13 billion and now has $30 billion in assets. Meanwhile, the Dimensional US Core Equity 2 ETF (DFAC) added $4 billion to push assets to $23 billion. These firms also have some new, under-the-radar family members like the JPMorgan U.S. Tech Leaders ETF (JTEK) and the Dimensional California Municipal Bond ETF (DFCA). However, there are many other actively managed that warrant more attention.
To celebrate, here are eight active ETFs that I think are under radar. One for each night of Chanukah that I will be celebrating at the end of this week. Freely consider putting a present under your Christmas tree for each as well.
Equity ETFs Worthy of a Spin
The Fidelity Enhanced Large Cap ETF (FELC) has $1.9 billion in assets. This might seem too large for an under-the-radar ETF. However, FELC just became an ETF in mid-November, converting from a mutual fund. Most people are probably unaware the ETF already has an established track record. In the three-year period ended October, the fund rose 11.6% on an annualized basis, beating the S&P 500 by 140 basis points. The U.S. equity fund takes a systematic active approach incorporating risk management into its process.
In contrast, the T. Rowe Price International Equity ETF (TOUS) has just $70 million in assets. While the firm launched some U.S. equity ETFs in the past, this international fund came to market in June 2023. TOUS is overweighted relative to the MSCI EAFE toward European stocks, with sector tilts for healthcare and information technology. The fund focuses on high-quality businesses like ASML and Novo Nordisk.
The BNY Mellon Concentrated International Equity ETF (BKCI) has $80 million in assets and is turning one year old this week. The fund owns just 30 stocks, less than one-fifth found in TOUS. The ETF is subadvised by Walter Scott & Partners. Air Liquide, Compass Group, and SAP were among the recent top positions. VettaFi will be talking with the management of BKCI during the Market Outlook Symposium on December 14. Registration is open.